R corp 3

What is the role of an Independent Director?

• To increase profits

• To manage daily operations

• To protect minority shareholders

• To represent majority shareholders

What percentage of the board must be composed of independent directors in certain corporations?

• 20%

• 30%

• 10%

• 50%

Which of the following is NOT a qualification for Independent Directors?

• Hold only one share of the company

• Not be a substantial shareholder

• Not be a relative of any director

• Have prior experience as an officer

How long is the general term of office for Independent Directors?

• 3 years

• 2 years

• 5 years

• 1 year

What is required if a vacancy occurs in the board?

• The position remains vacant indefinitely

• Immediate election of a new director

• Board may elect a replacement with SEC approval

• No action is needed

Who elects directors in a stock corporation?

• The corporate secretary

• The SEC

• The board of directors

• The shareholders

What is the quorum requirement for a valid election?

• All shareholders must be present

• At least 75% of shareholders

• At least majority of outstanding capital stock

• At least one-third of shareholders

What happens if no valid election is held?

• New directors are appointed by the SEC

• A new election is automatically scheduled

• Current directors continue in a holdover capacity

• The corporation is dissolved

Who can remove a director in a stock corporation?

• The SEC

• Stockholders owning at least 2/3 of the outstanding capital stock

• The chairman of the board

• Any shareholder

What is a ground for removal of a director?

• Discrimination

• Failure to attend meetings

• None of the above

• Being a relative of another director